This section consists of multiple choices & Short notes type questions. 
Answer all the questions. 
Part one carries 1 mark each & Part two carries 5 marks each.

Part one:
Multiple choices:
1. It is a study of economy as a whole.
a. Macroeconomics
b. Microeconomics
c. Recession
d. Inflation
2. A comprehensive formulation which specifies the factors that influence the demand for the product. a. Market demand
b. Demand schedule
c. Demand function
d. Income effect
3. It is computed when the data is discrete and therefore incremental changes is measurable.
a. Substitution effect
b. Arc elasticity
c. Point elasticity
d. Derived demand
4. Goods & services used for final consumption is called:
a. Demand
b. Consumer goods
c. Producer goods
d. Perishable goods
5. The curve at which satisfaction is equal at each point.
a. Marginal utility
b. Cardinal measure of utility
c. The Indifference Curve
d. Budget line
6. Costs that are reasonably expected to be incurred in some future period or periods are:
a. Future costs
b. Past costs
1
IIBM Institute of Business Management

Examination Paper of Managerial Economics
c. Incremental costs
d. Sunk costs
7. Condition when the firm has no tendency either to increase or to contract its output:
a. Monopoly
b. Profit
c. Equilibrium
d. Market
8. Total market value of all finished goods & services produced in a year by a country’s residents is known as:
a. National income
b. Gross national product
c. Gross domestic product
d. Real GDP
9. The sum of net value of goods & services produced at market prices:
a. Government expenditure
b. Product approach
c. Income…...

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Managerial economics is a study of application of managerial skills in economics,more over it help to find problems or obstacles in the business and provide solution for those problems.problems may be relating to costs, prices, forecasting the future market ,human resource management, profits etc.
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[pic]
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* Support for computerising the material by Mrs. R. Kalavathi as well as of Dr. N. S. Viswanath in providing the basic framework for developing this material is hereby acknowledged.
Module 1
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Answer
Managerial economics refers to the application of economic theory and the tools of analysis of decision science to examine how an organization can achieve it aims or objectives most efficiently.
Importance of managerial economics
Managerial Decision Problems
Economic theory
Microeconomics
Macroeconomics
Decision Sciences
Mathematical Economics
Econometrics
MANAGERIAL ECONOMICS
Application of economic theory
and decision science tools to solve
managerial decision problems
OPTIMAL SOLUTIONS TO
MANAGERIAL DECISION PROBLEMS
Managerial Decision Problems
Economic theory
Microeconomics
Macroeconomics
Decision Sciences
Mathematical Economics
Econometrics
MANAGERIAL ECONOMICS
Application of economic theory
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OPTIMAL SOLUTIONS TO
MANAGERIAL DECISION PROBLEMS
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(c) Non-competitive markets – a market in which market power exists.
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Introduction
Economics is the science of making decisions in the presence of scarce resources. Economics is the
study of the production and consumption of goods and the transfer of wealth to produce and obtain
those goods. Economics explains how people interact within markets to get what they want or
accomplish certain goals. There are mainly two key ideas in economics; that goods are scares and
society must use its resources efficiently.
Managerial economics is the study of how to direct scares resources in the way that most
efficiently achieves a managerial goal.
Managerial economics is the application of microeconomic theory and methodology to decisionmaking problems faced by private, public and non-profit institutions. It assists decision-makers i.e.
managers in efficiently allocating scarce resources, planning corporate strategy, and executing
effective tactics.
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